Should I even be thinking about pulling out of a sale?

Sarah1Mitty2

Emlulo said:

Hi all,

Looking for some honest (but kind, please) thoughts on my situation. If anyone has had similar, would also be interested!

I am due to exchange on a house end of Jan. This house was a LOT outside of my budget, and I have had to have family gift some of my deposit. I can afford the mortgage payments, with money to spare for savings etc, so it’s not unaffordably tight, however, it will mean less money at the end of the month than I had planned for.

The estate agent encouraged me to go for the house, and I do love it! But as I say, it was way out of my original planned budget.

I have just seen that a house I had wanted before this one (but lost out on) has come back on the market. It’s £80k cheaper than the one I am buying. It’s smaller, but it’s in the same location (which is perfect). I’d likely stay there for less time than the other bigger, more expensive house. However, it’s hard not to think about maybe going for the cheaper house. It would still be a lovely home! And it would mean a saving of around £8k in deposit (meaning no gifts needed for deposit) as well as £400 less a month in mortgage payments.

I have a little dream of working less and spending more time with my kids, and the latter house would make that much more feasible.

Should I even consider this? It would mean losing the money I have already put into solicitors fees (around £1k), plus risking losing my buyer as I’d be starting the process all over. Not to mention, of course I would feel awful for the seller as it’s not a great situation for them. But then again, the potential benefits would be considerable..

I’d love to know your thoughts (not on the morality of the situation, as I am aware of that), but just - would you do it/not do it?

Thanks in advance!  

Have you decided yet what you will do?

fackers_2

Emlulo said:

Hi all,

Looking for some honest (but kind, please) thoughts on my situation. If anyone has had similar, would also be interested!

I am due to exchange on a house end of Jan. This house was a LOT outside of my budget, and I have had to have family gift some of my deposit. I can afford the mortgage payments, with money to spare for savings etc, so it’s not unaffordably tight, however, it will mean less money at the end of the month than I had planned for.

The estate agent encouraged me to go for the house, and I do love it! But as I say, it was way out of my original planned budget.

…

Thanks in advance!  

That’s their job, to encourage sales and maximum figure… 

If the house you like that’s come back on the market is with a separate estate agent, I’d make your move, if it doesn’t work, you stick with plan A. 

fackers_2

[Deleted User] said:

Sarah1Mitty2 said:

[Deleted User] said:

GDB2222 said:

LegallyLandlord said:

One more thought is you could continue with the house sale and move into rented accommodation. Prices are likely to drop and unless the house you’re planning to buy is truly unique, others will come alone. 

You may well be correct about house prices, but there’s an enormous risk in getting off the housing ladder for the average individual. 

I was told this when i purchased during the pandemic. Prices are up 20% since. There is nothing comprable available in my area in terms of size and value. Glad I proceeded. Of course, A decrease is possible but trying to predict the market, trying to beat the market. Its fantasy.

Reality is that interest rates were at near zero during the pandemic, and now they are heading back to normal, many people are probably now regretting their timing as they could have waited and started with much less debt.

Being told by some bloke on the internet that you are wrong for buying a house which later increased in value by 20%. 

There is no such thing as waiting and having less debt. You have waited until mortgage rates increased which completely trumps the reductions (if indeed there are any).

Ehhh?! Of course there is… Not heard of savings? There could be a bonus payout or even a pay increase that could help make a different decision. 

movilogo

Should I even consider this?

Yes, why not? I have just done that.

I agreed on a house.
Paid for survey, searches, agreed mortgage - this was before mini budget.
Then mini budget came and housing market collapsed.
I found another house at same price which was bigger and location was far better for me.
My mortgage advisor confirmed I could use same mortgage product for different house.
I pulled out and purchased the this house (where I now moved in). 
The original house remained on market for a long time and got price reduced by £70k compared to what I offered (after that I saw SSTC in Rightmove).

There was one caveat though - I was only buying, not selling so was not in a chain so pulling out from a sale had little impact on me other than losing survey/searches/solicitor fees. 

Sarah1Mitty2

fackers_2 said:

[Deleted User] said:

Sarah1Mitty2 said:

[Deleted User] said:

GDB2222 said:

LegallyLandlord said:

One more thought is you could continue with the house sale and move into rented accommodation. Prices are likely to drop and unless the house you’re planning to buy is truly unique, others will come alone. 

You may well be correct about house prices, but there’s an enormous risk in getting off the housing ladder for the average individual. 

I was told this when i purchased during the pandemic. Prices are up 20% since. There is nothing comprable available in my area in terms of size and value. Glad I proceeded. Of course, A decrease is possible but trying to predict the market, trying to beat the market. Its fantasy.

Reality is that interest rates were at near zero during the pandemic, and now they are heading back to normal, many people are probably now regretting their timing as they could have waited and started with much less debt.

Being told by some bloke on the internet that you are wrong for buying a house which later increased in value by 20%. 

There is no such thing as waiting and having less debt. You have waited until mortgage rates increased which completely trumps the reductions (if indeed there are any).

Ehhh?! Of course there is… Not heard of savings? There could be a bonus payout or even a pay increase that could help make a different decision. 

Exactly, all sorts of new scenarios can present themselves.

_Sam_

movilogo said:

There was one caveat though - I was only buying, not selling so was not in a chain so pulling out from a sale had little impact on me other than losing survey/searches/solicitor fees. 

There is always the other caveat though - the risk of losing both properties as it is not guaranteed that your offer on the alternative house is going to be accepted/the sale will go through.

If the buyer is not desperate to move or doesn't have strong feelings either way then this risk would mean little to them, and they can shop around. But many buyers get emotional regarding their future place to live and if they find a nice house they like, it can be very upsetting if they subsequently lose the house and on top of that end up blaming themselves for the loss ("if only I proceeded with the original sale...")

Sarah1Mitty2

Emlulo said:

Hi all,

Looking for some honest (but kind, please) thoughts on my situation. If anyone has had similar, would also be interested!

I am due to exchange on a house end of Jan. This house was a LOT outside of my budget, and I have had to have family gift some of my deposit. I can afford the mortgage payments, with money to spare for savings etc, so it’s not unaffordably tight, however, it will mean less money at the end of the month than I had planned for.

The estate agent encouraged me to go for the house, and I do love it! But as I say, it was way out of my original planned budget.

I have just seen that a house I had wanted before this one (but lost out on) has come back on the market. It’s £80k cheaper than the one I am buying. It’s smaller, but it’s in the same location (which is perfect). I’d likely stay there for less time than the other bigger, more expensive house. However, it’s hard not to think about maybe going for the cheaper house. It would still be a lovely home! And it would mean a saving of around £8k in deposit (meaning no gifts needed for deposit) as well as £400 less a month in mortgage payments.

I have a little dream of working less and spending more time with my kids, and the latter house would make that much more feasible.

Should I even consider this? It would mean losing the money I have already put into solicitors fees (around £1k), plus risking losing my buyer as I’d be starting the process all over. Not to mention, of course I would feel awful for the seller as it’s not a great situation for them. But then again, the potential benefits would be considerable..

I’d love to know your thoughts (not on the morality of the situation, as I am aware of that), but just - would you do it/not do it?

Thanks in advance!  

Did the seller have lots of other offers apart from yours?

Emlulo

Hi all - just wanted to say thanks so much for all the really helpful, thoughtful advice and sharing of experiences. 

I did decide to proceed with the larger property in the end - although the smaller property would have been adequate, it lacked so many things I love about the bigger house (much more potential to extend, huge garden etc). I would have had a fair bit more money in my pocket with the cheaper house, but I don’t think it would have been the right decision.

in the end, I managed to get a £5k reduction on the bigger house and my original mortgage offer has dropped from 6.14% to 4.73% 😊 

Bonniepurple

It sounds like you made the right decision for you.  Ignore the people who say that prices will fall.  They won’t - at least, not as dramatically as the doomsayers are saying.  They may fall slightly, but more likely will stagnate.

We probably overpaid about £5000 for our current house.  Over our mortgage period (29 years), it works out as an extra £14.37 per month.  We don’t want to move, so the only people who will benefit from price rises are our daughters when they eventually have to deal with our Estate.  Hopefully that won’t be for a good 40 years yet!

Sarah1Mitty2

Bonniepurple said:

It sounds like you made the right decision for you.  Ignore the people who say that prices will fall.  They won’t - at least, not as dramatically as the doomsayers are saying.  They may fall slightly, but more likely will stagnate.

We probably overpaid about £5000 for our current house.  Over our mortgage period (29 years), it works out as an extra £14.37 per month.  We don’t want to move, so the only people who will benefit from price rises are our daughters when they eventually have to deal with our Estate.  Hopefully that won’t be for a good 40 years yet!

Never really happened in the past, can`t see a reason for it to happen now, property markets tend to be off/on switches. Good luck OP, grab that mortgage rate as it won`t be around long!